November 18, 2008

A January 19, 2004 press release

From the Department of Housing and Urban Development:

BUSH ADMINISTRATION ANNOUNCES NEW HUD "ZERO DOWN PAYMENT" MORTGAGE:
Initiative Aimed at Removing Major Barrier to Homeownership

LAS VEGAS - As part of President Bush's ongoing effort to help American families achieve the dream of homeownership, Federal Housing Commissioner John C. Weicher today announced that HUD is proposing to offer a "zero down payment" mortgage, the most significant initiative by the Federal Housing Administration in over a decade. This action would help remove the greatest barrier facing first-time homebuyers - the lack of funds for a down payment on a mortgage.

Speaking at the National Association of Home Builders' annual convention, Commissioner Weicher indicated that the proposal, part of HUD's Fiscal Year 2005 budget request, would eliminate the statutory requirement of a minimum three percent down payment for FHA-insured single-family mortgages for first-time homebuyers.

"Offering FHA mortgages with no down payment will unlock the door to homeownership for hundreds of thousands of American families, particularly minorities," said HUD's Acting Secretary Alphonso Jackson. "President Bush has pledged to create 5.5 million new minority homeowners this decade, and this historic initiative will help meet this goal."

Preliminary projections indicate that the new FHA mortgage product would generate about 150,000 homebuyers in the first year alone.

"This initiative would not only address a major hurdle to homeownership and allow many renters to afford their own home, it would help these families build wealth and become true stakeholders in their communities," said Commissioner Weicher. "In addition, it would help spur the production of new housing in this country."

For those that choose to participate in the Zero Down Payment program, HUD would charge a modestly higher insurance premium, which would be phased down over several years, and would also require families to undergo pre-purchase housing counseling.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

This is the kind of thing that sends a message to private industry that not only will the government not crack down on zero down mortgages, it looks favorably upon them. Rather than regulators taking away the punchbowl when the party got interesting, it was pouring vodka in.


My published articles are archived at iSteve.com -- Steve Sailer

18 comments:

Big Bill said...

I searched Google images for Alphonso Jackson. No surprise there.

Old joke:

Q: What is the difference between Zimbabwe and South Africa?

A: 10 years.

New Joke:

Q: What is the difference between Zimbabwe and America?

A: 20 years.

With AA/BEE incompetents like Alphonso, we are not very far behind South Africa.

Frank said...

This mortgage scheme was run out of the FHA. However, the FHA seems much healthier than Fannie/Freddie. According to Wikipedia it had a $140 million shortfall for FY2008, small potatoes compare to F/F. I think that Steve Sailer is on to something when he points out the Bush/Rove bribery of the Hispanic voters, but insofar as I can gather it's still an 80-20 proposition for the mortgage crisis with the Democrats taking the majority blame. With the D's in charge of the whole schbang, I hope he is going to be as keen on his Obama-ness. I think the voter bribery with O and the D's will be immeasurably larger.

Captain Jack Aubrey said...

With AA/BEE incompetents like Alphonso, we are not very far behind South Africa.

Our newly elected black president selected Rahm Emanuel to be his Chief of Staff. Today he announced that Eric Holder, a black New Yorker whose parents were from Barbados will be his nominee for Attorney General. Rahm Emanuel reportedly wants Harvard Law Dean Elena Kagan (also a rumored SOCTUS nominee) to be his Deputy AG. No points for guessing to which ethnic group Ms. Kagan belongs.

Chris said...

Steve, Steve, Steve, I'm dying to see your reaction to Michiko Kakutani's assault on "Outliers" in Sunday's NYT. It's delicious. Gladwell is exposed as a diletantte, at last. Please weigh in!

eh said...

...and would also require families to undergo pre-purchase housing counseling.

Oh. Well, what could have gone wrong then?

Noumenon said...

Would this zero down payment initiative be following the lead of all the private lenders, or did it actually initiate the process?

testing99 said...

Aubrey -- Obama is not experienced in national politics nor appealing to White voters beyond Rich White Yuppie radicals like Ayers and Dohrn. As Sailer has pointed out.

The danger of his cabinet being too "Black" is that he looks a purely Black President, something he is likely to do given his shallow political roots and experience. Blacks are only 12% of the population and if he constructs a cabinet that brings to life the "So Long White Boy" mentality of the Dems it will be a very interesting two years up to 2010.

Somewhat OT: Drudge, Hotair, Times UK, WSJ are all reporting on the PIRACY epidemic out of Somalia. "International law" aka making the Press and NGO's happy won't allow for detention/trial and the "usual" remedies to piracy, in the last quarter alone pirates have seized 32 ships and over 500 crewmen.

The latest, a Saudi Supertanker the size of an Aircraft carrier, more than 200 miles out to sea. The pirates are using "mother ships" to launch fast little zodiacs or launches against the unarmed ships.

We are putting the question to the test -- is human nature "changed" and can the West in effect disarm against chaotic groups that only make money by robbery?

So far the answer is no. Most of the Gulf oil moves through the Gulf of Aden on it's way to Europe via Suez Canal. More than 50% of the world's oil according the WSJ moves by ship. Pirates operating out the shell of Somalia are only going to be crushed by an expedition of a navy with ground forces (to essentially mine/ruin the ports the mother ships launch from). Expensive, time consuming, the only way to end it. You can't avoid it because they're already operating in deep waters more than 200 miles offshore.

There is a huge piracy problem in and around Indonesia. India and China are each making noises about naval expeditions to "fix" the problem because Indonesia and Malaysia have been incompetent and unwilling to do so.

Anonymous said...

Re: testing 99's comment. The Somalian piracy story is interesting to follow in the MSM, since it has politically incorrect bad guys.

One can't help but make a connection to Steve's "Nigerian scammer" post from yesterday.

Henry Canaday said...

Interesting dateline, Las Vegas, and interesting timing, 2004, about the time that private markets and real estate veterans were starting to worry about the burden of previous junk loans and the sustainability of the housing price escalation that masked risks posed by junk loans.

Steve Sailer said...

The two words "Las Vegas" seem to pop up a lot in accounts of the mortgage meltdown.

Anonymous said...

testing99,

MSNBC has several articles on the piracy epidemic. One of them is here.

Note the response from the US and NATO: "Hey, we can't be everywhere! And look how big the ocean is! And besides, those guys are armed!" Instead, the military with all its ultra-powerful sonar/radar and cruise missiles tells the multinationals to hire their own navies, and Blackwater is already submitting applications.

In sum, it appears the market-state militaries are good for nothing but overruning dysfunctional countries presided over by tin pot dictators. Fourth Generation warfare has them completely baffled. They will not even begin to fight it, and freely admit their incompetence to their largest patrons. Note also the pussified response of the think tanks: waterhoses, grease the guardrails so the pirates can't get a grip.

Bottom line, the USG takes a third of my income to not do the one thing I'd voluntarily pay them to do. The sooner it fails due to imperial and fiscal overreach the better, as far as I'm concerned.

--Senor Doug

anon #5 said...

However, the FHA seems much healthier than Fannie/Freddie.

Key word here is "seems".

I worked tech support for a CRA from April 07 through August 08. Our customers were mortgage brokers. Back in February, seemingly overnight every other customer was talking about FHA and getting their customers (home buyers) qualified for FHA. These people didn't exactly have spectacular credit. My opinion is that tons of them will be defaulting in a year or three.

Anonymous said...

testing99,
The piracy problem can be solved relatively quickly and easily by the US. The will is lacking, not the means. However, India just blew some pirates out of the water. And if the PRC gets into the act, those pirates are going to wish it was the US Navy on their asses as the military forces of the People's Republic tend to be a bit overenthusiastic at times. Perhaps the lesson of Tibet was not instructive enough...

Captain Jack Aubrey said...

Blacks are only 12% of the population and if he constructs a cabinet that brings to life the "So Long White Boy" mentality of the Dems it will be a very interesting two years up to 2010.

But Clinton pretty much already did that - his administration basically had a "So long, white gentile" mentality. I'm guessing that the fraction of Obama's cabinet that is white and non-Jewish will be lower than even Clinton's.

Republicans have a valid excuse for not having any blacks at all in their cabinet - over 90% of blacks are Democrat. 45% of whites still voted for Obama, though, and most weren't jewish.

Drudge, Hotair, Times UK, WSJ are all reporting on the PIRACY epidemic out of Somalia. "International law" aka making the Press and NGO's happy won't allow for detention/trial and the "usual" remedies to piracy, in the last quarter alone pirates have seized 32 ships and over 500 crewmen.

Somalia should be seized and turned into a UN-managed refugee colony. The piracy epidemic is a great excuse to do it. That would provide an excuse to stop bringing African refugees to the US.

Bush could still obligate us to the course, in the same manner that his daddy sent troops to Somalia in the waning years of his own administration.

Truth said...

"ur newly elected black president selected Rahm Emanuel to be his Chief of Staff. Today he announced that Eric Holder, a black New Yorker whose parents were from Barbados will be his nominee for Attorney General..."

Worst of all, I heard that he was trumpeting Dr. James Watson as Secretary of Education; Will this AA madness ever end?!

Orion said...

Where better to make a horribly bad bet that will cripple your families finances for years? This was just on a larger scale. Viva Lost Wages.

Anonymous said...

cja said

I'm guessing that the fraction of Obama's cabinet that is white and non-Jewish will be lower than even Clinton's.

Try zero percent. I don't believe Hillary will accept the offer.

David said...

Big Bill, we can feel confident about the future. In 2012, this man will take care of everything:

Lee Mercer for President

Better than that "white trash" Sarah Palin!! We need change in this racist country. Nickels, dimes, pennies - anything will do.